Levy limits establishment for cities and counties

A bill for an act

relating to taxation; property; establishing levy limits for cities and counties;

modifying the authorization process for additional levies above the limit; amending

Minnesota Statutes 2024, sections 275.71, subdivisions 2, 4; 275.73, by adding a

subdivision; repealing Minnesota Statutes 2024, section 275.73, subdivisions 1,

2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 275.71, subdivision 2, is amended to read:

Subd. 2.

Levy limit base.

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The levy limit base for a local governmental unit for taxes

levied in 2008 is its levy aid base from the previous year, subject to any adjustments under

section
275.72
. For taxes levied in 2009 and 2010, the levy limit base for a local

governmental unit is its adjusted levy limit base in the previous year, subject to any

adjustments under section
275.72
.

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The levy limit base for a local governmental unit for taxes levied in 2026 and thereafter

is the final levy certified by the local governmental unit in the preceding year under section

275.07, subject to adjustments for consolidation and annexation under section 275.72.

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EFFECTIVE DATE.

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This section is effective for property taxes payable in 2027 and

thereafter.

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Sec. 2.

Minnesota Statutes 2024, section 275.71, subdivision 4, is amended to read:

Subd. 4.

Adjusted levy limit base.

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For taxes levied in 2008 through 2010, the adjusted

levy limit base is equal to the levy limit base computed under subdivision 2 or section

275.72
, multiplied by:

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(1) one plus the percentage growth in the implicit price deflator, but the percentage shall

not be less than zero or exceed 3.9 percent;

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(2) one plus a percentage equal to 50 percent of the percentage increase in the number

of households, if any, for the most recent 12-month period for which data is available; and

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(3) one plus a percentage equal to 50 percent of the percentage increase in the estimated

market value of the jurisdiction due to new construction of class 3 property, as defined in

section
273.13, subdivision
24, except for state-assessed utility and railroad property, for

the most recent year for which data is available.

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For taxes levied in 2026 and thereafter, the adjusted levy limit base for a local

governmental unit equals the levy limit base computed under subdivision 2 multiplied by

the sum of one and the greater of zero or the percentage change in the implicit price deflator

between the first quarter of the levy year and the first quarter of the preceding year.

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EFFECTIVE DATE.

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This section is effective for property taxes payable in 2027 and

thereafter.

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Sec. 3.

Minnesota Statutes 2024, section 275.73, is amended by adding a subdivision to

read:

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Subd. 3.

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Additional levy authorization.

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(a) Notwithstanding the provisions of sections

275.70 to 275.72, but subject to other law or charter provisions establishing other limitations

on the amount of property taxes a local governmental unit may levy, a local governmental

unit may levy an additional levy in any amount by a resolution approved by a unanimous

vote of the governing body of the local governmental unit. The resolution and notice of the

public hearing during which the resolution will be discussed must be posted on the local

governmental unit's website and in a newspaper with general circulation within the

governmental unit for two successive weeks before the public hearing.

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(b) Notwithstanding section 275.61, any levy authorized under this section must be

levied against net tax capacity unless the levy required voter approval under another general

or special law or any charter provisions.

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(c) An additional levy approved on or before the first Tuesday after the first Monday in

November in any levy year may be levied in that same levy year and subsequent levy years.

An additional levy approved after the first Tuesday after the first Monday in November in

any levy year shall not be levied in that same levy but may be levied in subsequent levy

years.

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EFFECTIVE DATE.

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This section is effective for property taxes payable in 2027 and

thereafter.

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Sec. 4.
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REPEALER.
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Minnesota Statutes 2024, section 275.73, subdivisions 1 and 2,

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are repealed.

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APPENDIX

Repealed Minnesota Statutes: 26-07484

275.73 ELECTIONS FOR ADDITIONAL LEVIES.

Subdivision 1.

Additional levy authorization.

Notwithstanding the provisions of sections
275.70
to
275.72
, but subject to other law or charter provisions establishing other limitations on the amount of property taxes a local governmental unit may levy, a local governmental unit may levy an additional levy in any amount which is approved by the majority of voters of the governmental unit voting on the question at a general or special election. Notwithstanding section
275.61
, any levy authorized under this section must be levied against net tax capacity unless the levy required voter approval under another general or special law or any charter provisions. When the governing body of the local governmental unit resolves to increase the levy pursuant to this section, it shall provide for submission of the proposition of an additional levy at a general or special election. Notice of the election must be given in the manner required by law. The notice must state the purpose and the maximum yearly amount of the additional levy.

Subd. 2.

Levy effective date.

An additional levy approved under subdivision 1 at a general or special election held on or before the first Tuesday after the first Monday in November in any levy year may be levied in that same levy year and subsequent levy years. An additional levy approved under subdivision 1 at a general or special election held after the first Tuesday after the first Monday in November in any levy year shall not be levied in that same levy but may be levied in subsequent levy years.